EFRAG supports the IASB's proposed amendments to IFRIC 14 Prepayments of a Minimum Funding Requirement

14 July 2009

EFRAG notes that prepayments of Minimum Funding Requirement contributions relating to future service will meet the definition of an asset under the existing Framework. 

IFRIC 14 (IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding requirements and their Interaction) currently does not regard a surplus created by a voluntary prepayment of a minimum funding requirement contribution relating to future service as an asset if the future minimum funding contributions required in respect of future service exceed future service costs. As such, such voluntary prepayments will be expensed even though the entity derives future benefit from them. The proposed amendments in the ED seek to address this anomaly.

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